Imports/Exports Favorable for March, BofA Beats in Q1

Why It Matters

Lower core import inflation eases pressure on consumer prices, while stronger export pricing and robust bank earnings signal resilience in the U.S. economy amid geopolitical tension.

Key Takeaways

• Import prices rose 0.8% MoM, well below 2.4% forecast
• Core import inflation eased to 0.2%, missing 1.1% expectations
• Export prices climbed 1.6% MoM, reaching 5.6% YoY, strongest since Nov 2022
• Bank of America beat Q1 earnings, EPS $1.11, revenue $30.27B
• Empire State Manufacturing index jumped to +11, defying -0.5 forecast

Pulse Analysis

The March import‑price report offers a surprising reprieve for inflation watchers. Although headline import costs rose 0.8%, the core measure—excluding volatile fuel—was a modest 0.2%, well under the 1.1% consensus. This divergence reflects the limited immediate impact of the Iran‑Houthi conflict in the Strait of Hormuz on U.S. supply chains, but analysts caution that higher global oil prices could filter through in April. For policymakers, the softer core import inflation provides a buffer against aggressive rate hikes, while businesses may see marginal cost relief in sectors reliant on imported inputs.

Corporate earnings added another layer of optimism. Bank of America delivered an 11% earnings beat, posting $1.11 per share and $30.27 billion in revenue, nudging its stock higher in pre‑market trade. Morgan Stanley’s 25% year‑over‑year surge in equities‑trading revenue underscores the continued appetite for market participation despite volatility. Progressive’s mixed results—modest EPS beat but revenue miss—highlight the uneven recovery across industries. Collectively, these results suggest that major financial institutions are navigating the current macro environment effectively, bolstering confidence in the broader equity market.

On the macro front, the Empire State Manufacturing index leapt to +11, reversing a projected decline and marking the third positive reading in four months for New York. Coupled with an uptick in homebuilder confidence to a projected 37 and the upcoming Fed Beige Book, the data points to a cautiously upbeat economic backdrop. While geopolitical risks around the Strait of Hormuz linger, the blend of softer import inflation, resilient export pricing, and solid corporate earnings paints a picture of a U.S. economy that can sustain growth momentum into the second half of 2026.